US GDP: A figure closer to 5% would likely be needed to prompt a notable move higher for yields and USD – MUFG

US GDP: A figure closer to 5% would likely be needed to prompt a notable move higher for yields and USD – MUFG

The US Dollar remains broadly stable in the foreign exchange market at the start of the week. Economists at MUFG Bank analyze Greenback’s outlook.

US yields remain elevated, providing USD support 

The 10-year yield remains close to the 5.00% level and hence risk appetite will likely remain fragile given the challenge for risk assets on a further move higher in US yields.

Q3 GDP from the US will be released this week and the rate of growth is expected to accelerate from the 2.1% QoQ SAAR in Q2 to 4.1% in Q3. With a notable slowdown in GDP growth expected in Q4, a figure closer to 5.0% would likely be needed to prompt a notable move higher for yields and the Dollar.

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